BLACK EARTH FARMING LTD.: BLACK EARTH FARMING LTD SIX MONTHS REPORT COVERING THE PERIODJANUARY 1 - JUNE 30, 2008

Reporting period highlights

Net turnover for the first six months of 2008 amounted to RUR 717,006 thousand
(USD* 30,566 thousand) which includes gain on revaluation of biological assets
and agricultural produce in the amount of RUR 416,965 thousand (USD* 17,775
thousand). Net turnover for the same period in 2007 was equal to RUR 213,882
thousand (USD* 9,118 thousand) with gain on revaluation of biological assets
and agricultural produce in the amount of RUR 199,606 thousand (USD* 8,509
thousand). 

Operating income for the first half of 2008 amounted to RUR 73,541 thousand
(USD* 3,134 thousand) compared to RUR 18,874 thousand (USD* 804 thousand) for
the same period in 2007. The operating income was significantly affected by the
general and administrative expenses in the amount of RUR 344,029 thousand (USD*
14,666 thousand) in comparison, the general and administrative expenses
amounted to RUR 141,510 thousand (USD* 6,033 thousand) in the same period 2007.
The largest expense item was salary - constituting about 70% of the total
amount of general and administrative expense. The significant increase in
salary is explained by the extensive ramp up in personnel during the year. 

Earnings after tax for the first six months of 2008 amounted to RUR 138,887
thousand (USD* 5,920 thousand) compared with a loss for the same period of 2007
which amounted to RUR 69,611 thousand (USD* 2,969 thousand). In the first half
of 2008 gain on revaluation of biological assets and financial income
contributed significantly to the financial result. 

Cash outflow from operating activities amounted to RUR 980,805 thousand (USD*
41,813 thousand) compared to RUR 496,335 thousand (USD* 21,160 thousand) in
2007. Such significant increase in operating activities in 2008 is attributed
to the large increase in the amount of hectares cropped in comparison with
2007. The profit for the period has been adjusted by the depreciation and
amortization charges which amounted to RUR 214,053 thousand (USD* 9,125
thousand). The other significant amounts that affected the result for the
period were the foreign exchange gain of RUR 188,262 thousand (USD* 8,026
thousand) and increase in inventories in the amount of RUR 612,870 thousand
(USD* 26,127 thousand). 

Cash outflows utilized by investing activities amounted to RUR 1,219,543
thousand (USD* 51,990 thousand) in comparison with RUR 1,602,727 thousand (USD*
68,326 thousand) in 2007. In 2008 the significant cash outflows were mainly
concerned with acquisition of fixed assets and land plots in the amount of RUR
1,706,782 thousand (USD* 72,762 thousand), compared to RUR 1,648,550 thousand
(USD* 70,279 thousand) in the first half of 2007. 

Cash inflow from financing activities for the first six months of 2008 amounted
to RUR 904,820 thousand (USD* 38,573 thousand) compared to RUR 1,654,521
thousand (USD* 70,533 thousand) for the same period in 2007. In January 2008
the company issued 4,800 thousand ordinary shares in connection with the IPO
following the exercise of the over allotment option. In addition there was a
private placement of 155 thousand ordinary shares during the period from the
exercise of warrants 

Earning per share was equal to RUR 1.12 (USD* 0.05) for the first half of 2008
compared to a loss per share of RUR 0.91 (USD* 0.04) for the same period in
2007. 

As of 30 June 2008 the Company controlled about 331,000 hectares of land,
including 71,000 hectares in registered ownership and 8,100 hectares of
registered long term leases. 


Significant events after the end of the reporting period

As of 1 August 2008 the Company had obtained ownership certificates for an
additional 8,600 hectares of land compared to the end of the second quarter,
bringing the total of owned land to 79,700 hectares. 

As of 28 July 2008 the Company's largest share holder Vostok Nafta Investment
Ltd had increased its stake in the Company from 21.5% to 24.8%. 


* The USD equivalent figures are provided for information purposes only and do
not form part of the interim consolidated financial statements - refer to note
2 (d) in the complete interim report. 


Six months report conference call

Date: 25 August 2008 

Time: 15:00 CET

Hosts: Founder and President - Michel Orlov
CFO - Michael Shneyderman
Chief Agronomist - Sture Gustavsson
IR Director - Gustav Wetterling

Dial-in details: UK: +44 (0)20 7806 1967 
USA: +1 718 354 1389
Sweden: +46 (0)8 5352 6407

Participant passcode: 9852114

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See attached complete report.

For additional information, please contact:

Gustav Wetterling, IR Director, Black Earth Farming Ltd., tel: +44 207 117 81 00

Notes to Editor:

Black Earth Farming Ltd. is a leading farming company operating in Russia. It
acquires, owns and cultivates agricultural land assets primarily in the fertile
Black Earth region in southwest Russia. Black Earth Farming has gained a strong
market position in the Kursk, Tambov, Lipetsk, Samara, Voronezh and Ryazan
areas, controlling about 331,000 hectares of what perhaps is the world's most
fertile soil. Black Earth Farming will continue to acquire farmland in order to
draw full benefits of economies of scale in its operations. 

In 2007, Black Earth Farming harvested approximately 53,000 hectares with
crops, of which the greater part was wheat. In 2008, Black Earth Farming plans
to harvest almost 150,000 hectares. 

Founded in 2005 by Michel Orlov, the company has been developed by the listed
investment companies Vostok Nafta Investment Ltd. and Investment AB Kinnevik
(publ). 


Black Earth Farming's Certified Advisor on First North is E. Öhman J:or
Fondkommission AB